New Delhi: In a setback to generic drug makers, the Delhi high court on Friday set aside an order of the Deputy Controller of Patents and Designs rejecting a patent to US drug maker Gilead Pharmasset Llc for the hepatitis C drug Sovaldi.

The medicine costs $1,000 a pill and cures hepatitis C in 90% of cases when given for a 12-week course.

India’s patent office had questioned the therapeutic efficacy under which the patent was claimed by Gilead and rejected its application using the controversial Section 3(d) of the Patents Act, which prevents evergreening of patents and provides that no new form of an existing substance shall be patented unless the new form is much more effective than the old one.

The Indian patent office, while rejecting the patent application, had maintained that minor changes in the molecule did not improve its efficacy. With the patent set aside, domestic generic drug manufacturers could make the same drug for as low as $1 a pill.

“It was expected that the appeal would succeed because the process of reasoning in the controller’s order was really shoddy, without commenting on the merits of the conclusion,” said Shamnad Basheer, former professor at National University of Juridical Sciences, Kolkata, and founder of intellectual property blog SpicyIP.

“India is coming under a lot of attack for Section 3(d) of the Patents Act and we have been able to defend Section 3(d) because most of the orders on this section are well-reasoned ones,” Basheer said. “Therefore, to now have a decision that is badly reasoned opens us up to a lot of criticism, so we must be very careful.”

At the stage of examination of the patent application, the pre-grant opposition could not have been considered by the controller without giving it a notice according to the procedure under the law, according to Gilead. The patent office had rejected the application by Gilead Science for Sovaldi on 13 January.

Claiming that the “entire order (rejecting Gilead’s patent) was coloured by the pre-grant opposition”, Gilead’s lawyer Prathiba Singh argued that while the controller had claimed that he had not relied on claims made in the pre-grant opposition applications, there were striking similarities in certain parts of the order of the controller and the opposition application of Indian generic manufacturer Natco Pharma Ltd.

“The order has not been passed yet and it will be premature for us to comment without reading it. However, the central argument of our case is not threatened. There were issues with the process that was followed,” said Lorraine Misquith of Lawyer’s Collective, a non-profit organization. “We are not worried as we filed another opposition today. We believe we have a very strong case.”

Justice Rajiv Shakdher said the question whether the material furnished by the opponents coloured the mind of the controller was something to be determined from the circumstances, and it appeared that the patents office “generously took assistance from the material” filed by the opponents. The court also observed that the intentions of the patents office may have been good, but the procedure followed by it was improper.

A written order is yet to be passed in the case.

“The application has been sent back and the court has stated that an order cannot be passed without every opposing party being heard,” said Vikas Ahuja of Delhi Network of Positive People, one of the pre-grant opposition applicants. “There are four oppositions in this matter and we will make our case when this goes back to the patent office.”